Climate Group Sues Oil Firm Over Net-Zero Claims In A World First

The Australasian Centre for Corporate Responsibility (ACCR) filed on Thursday a lawsuit with the Federal Court of Australia, challenging claims of energy giant Santos that natural gas provides “clean energy” and questioning its net-zero targets, in a world-first court case to challenge the veracity of a company’s net-zero emissions targets.

Australia-based gas producer and developer Santos aims to reduce its Scope 1 and Scope 2 emissions to net zero by 2040. Santos has set an intermediate target to cut its Scope 1 and Scope 2 emissions and emissions intensity by 26-30 percent by 2030. The company bets on carbon capture and storage (CCS) projects to purse more drastic emissions reductions in the coming decades.

Environmental Defenders Office, acting on behalf of ACCR, will argue that Santos’ claims that natural gas is “clean fuel” and that it has a credible pathway to net zero emissions by 2040 “constitute misleading or deceptive conduct” under the Corporations Act 2001 and the Australian Consumer Law, EDO said.

The court case is also “a landmark, world-first test case in relation to the viability of carbon capture and storage, and the environmental impacts of blue hydrogen, increasingly touted as a key element in gas companies’ pathways toward net zero emissions,” EDO added.

“Santos has perfected the art of greenwashing, and shareholders continue to be misled by Santos’ clean energy claims,” said Dan Gocher, Director of Climate and Environment at ACCR.

“Santos’ ‘clean energy’ and ‘net zero’ claims pose a major risk to investors as it becomes increasingly more difficult to differentiate between companies taking genuine action versus those relying largely on offsets or unproven technologies,” Gocher noted.

The first court case challenging the oil industry’s pathways to net-zero emissions is not surprising as environmental groups have upped the pressure on the sector since a Dutch court in May ordered Shell to slash its carbon emissions by 45 percent by 2030 in a landmark ruling.

According to Verisk Maplecroft’s Environmental Risk Outlook 2021, legal liabilities related to climate are becoming more mainstream. Nearly 3,000 cases have been lodged since the start of the century, “primarily aimed at changing government policy or claiming compensation from fossil fuel companies for their contributions to global heating.” 

By Tsvetana Paraskova for Oilprice.com

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